Powering the kingdom

Earlier this year, US energy conglomerate General Electric (GE) set a goal of broadening its $1bn nuclear service-and-parts business. With countries increasingly embracing nuclear power as a means to shed light on power blackouts, it was also aiming to push sales of new reactors.

The landscape all changed in March 11 when an earthquake and tsunami in Japan crippled reactors at the country’s Fukushima Dai-Ichi nuclear plant — where three of the reactors were designed by GE — and governments from Germany to India and China began to scale back or halt their nuclear programmes.

So will more countries follow suit and is this the final nail in the coffin for nuclear power? “I can’t comment on why certain countries reacted the way they did… [But] I don’t think so,” Joseph Anis, president and CEO of GE Energy in the Middle East, tells Arabian Business in an interview at a GE event in Saudi Arabia.

While the UAE’s nuclear safety regulator recently announced it is conducting “a very thorough review” of the emirate’s atomic power plans, one big Gulf energy player is racing in the opposite direction and has given its seal approval to nuclear power: the Kingdom of Saudi Arabia.

The world’s largest oil exporter says it will invest $300bn building sixteen nuclear reactors over the next two decades, in a bid to meet 20 percent of its electricity needs. Bids for each reactor, which will cost up to $7bn each to build, will be open to international companies, and GE is looking to try and snatch a share of this potentially lucrative new market.

“I think it is a great step [that] they have put out that announcement,” says Anis. “The first step is the governments start talking to each other and put their policies in place. Once that happens, nuclear manufacturers will come in and start supporting those programmes and participating in their tenders. As they launch that, we will certainly be there to participate.”

It is predicted that Saudi Arabia’s demand for electricity is set to double by 2020 and GE turbines currently help generate nearly half of all the electricity used in the kingdom, therefore the company already has a solid footing in the Saudi energy market and this new nuclear focus is a way for it to maintain its market share.

“In terms of nuclear energy, we have been in that business for 60 years. Nuclear energy policy is driven by the government,” says John Krenicki, vice chairman of GE and president of GE Energy. “If the government of Saudi Arabia wants GE here in the nuclear business we will be here, but again, nothing happens in nuclear without government approval.”

GE Energy has announced over $10bn in power generation equipment and services in the Middle East over the last two years and it has secured projects such as a $2.6bn contract for a power plant in Kuwait, a $500m contract in Bahrain, a $1bn project in Riyadh and $3bn to supply power generation equipment in Iraq.